State pension warning issued to anyone who is considering National Insurance top-up

People looking at topping up their National Insurance (NI) contributions to increase their state pension have been urged to make sure they calculate how much they will actually benefit.

Neil Rayner, head of Advice at True Potential, crunched the numbers to explain how much topping up could boost your payments.

He told Express.co.uk: "Catching up on a year of missed NI contributions this year could cost as much as £907.40, which increases your annual pre-tax pension by £302.64, or just £5.82 per week.

"This might not significantly impact your retirement finances given today's rising living costs. Therefore, it's essential to complement your state pension with diverse income sources built from a robust retirement strategy that includes personal pensions, stocks and shares ISAs, and other savings vehicles to ensure a comfortable and financially secure retirement."

He spoke about the type of people for whom it may not be appropriate to pay to fill in gaps in their National Insurance record.

Mr Rayner said: "Those who may have other substantial retirement plans or financial constraints might prioritise differently.

"Yes, people should consider topping up their NI contributions if feasible, but it's equally important to ensure they have multiple streams of retirement income, including personal pensions.

"Consulting with a financial adviser is advisable for anyone curious about the best approach to take. This helps ensure a well-rounded retirement strategy that adjusts to personal financial situations and goals."

But he said for those who are thinking of topping up, now is a good time to do so, as there is a window where people can top up their contributions over an extended period, as far back as 2006.

Mr Rayner said: "It’s a good time for people to consider topping up their National Insurance contributions, not just because of the approaching deadline, but also as a key step in evaluating their entire retirement portfolio.

"By assessing how topping up fits within their broader investment strategies, including other pensions, ISAs, and stocks and shares, individuals can make informed decisions that align with their long-term financial goals.

"Acting now allows ample time to adjust their strategies in other areas if necessary, ensuring a balanced and diversified approach to securing their financial future in retirement."

People can apply to top up their contributions over the extended period until the end of this tax year, in April 2025.

State pension payments increased 8.5 percent from April, with the full new state pension now paying £203.85 a week.

But many household bills have also gone up from this month, including water bills, council tax, and mobile and broadband.

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